Command Center Reports 2014 Financial Results

Command Center, Inc. (OTCQB: CCNI), a national provider of on-demand and
temporary staffing solutions, reported financial results for the fourth
quarter and full year ended December 26, 2014.

Financial Highlights

Revenue was $24.0 million in Q4 2014 and $91.8 million in the full
year, with both periods declining approximately 2% versus comparable
year-ago periods.

Gross margins in Q4 2014 increased 340 basis points to 29.7%, with the
full year up 190 basis points to 27.8%.

Operating income in Q4 2014 was $1.7 million, up 22% from Q4 2013,
with the full year improving 49% to $6.5 million.

Net income in Q4 2014 was $1.1 million, decreasing 9% from Q4 2013,
with the full year up 210% to $9.1 million.

Adjusted EBITDA was $1.8 million in Q4 2014, up 19% from Q4 2013, with
the full year up 49% to $7.0 million.

Full Year and Fourth Quarter 2014 Financial Results

Revenues in the fourth quarter of 2014 decreased approximately 2% to
$24.0 million, compared to $24.6 million in the same year-ago quarter.
For the full year, revenue totaled $91.8 million, a decline of 2% from
$93.7 million in 2013. The decrease in revenue in both periods was a
result of the company’s continued transition and focus on higher margin,
higher quality customer engagements. Same-store sales were flat in the
fourth quarter of 2014 and increased 4.5% for the full year.

Gross margins in the fourth quarter improved to 29.7% from 26.2% in the
same year-ago quarter and for the full year improved 190 basis points to
27.8% from 25.9%. Improved gross margins in both periods resulted
primarily from the company’s continued focus on attracting and servicing
quality accounts. The company also continues to benefit from its
strategies for improving employee safety in the form of lower workers’
compensation related costs. These efforts include employee training
programs, enhanced onsite monitoring of work locations, and continuous
and consistent evaluation of current and potential job duties of our
workers.

Operating income for the fourth quarter of 2014 increased 22% to $1.7
million versus $1.4 million in the year-ago quarter and for the full
year was up 49% to $6.5 million versus $4.4 million in 2013. The
improvement in both periods is largely attributable to higher gross
margins. While lower SG&A costs for the year also contributed to the
improvement, SG&A costs in the fourth quarter of 2014 increased 8% over
the same year-ago period as the result of hiring additional staff to
support future anticipated growth. Non-cash compensation also increased
approximately $316,000 in the fourth quarter of 2014, as the company
broadened its equity compensation program to include all full time
employees.

Net income in the fourth quarter of 2014 decreased 9% to $1.1 million,
compared to $1.2 million in the year-ago quarter. For the full year of
2014, net income increased 210% to $9.1 million, compared to $2.9
million in 2013. Fully diluted earnings per share in the fourth quarter
of 2014 and 2013 were $0.02 and were $0.14 for the full year of 2014
compared to $0.05 in 2013.

Excluding the provision for income taxes, net income in the fourth
quarter of 2014 was $1.7 million or $0.02 per diluted share, with no
such tax provision occurring in the comparative year-ago quarter. In the
third quarter of 2014, the company recognized the benefit of its net
operating loss (NOL) with a reduction in income tax expense. In the
fourth quarter of 2014 and going forward, the company will record income
tax expense at normal rates, with an offsetting reduction in its
deferred tax asset until the NOL is depleted.

Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization, and the change in fair value of derivative liabilities)
for the fourth quarter of 2014 increased 19% to $1.8 million or $0.03
per diluted share from $1.5 million or $0.02 per diluted share in the
year-ago period. For the full year, adjusted EBITDA increased 49% to
$7.0 million or $0.11 per diluted share from $4.7 million or $0.08 per
share in 2013 (see discussion about the presentation of adjusted
EBITDA, a non-GAAP term, and its reconciliation to the nearest GAAP
metric, below).

Cash at December 26, 2014, increased to $8.6 million compared to $5.8
million at December 27, 2013, with the increase resulting from greater
cash flow from operations.

In 2014, the company opened three branch locations, ending the year with
55 stores operating in 22 states. The company also served more than
3,400 customers in 2014, utilizing more than 32,000 temporary employees.

Further details about the company’s results in 2014 are available in its
Annual Report Form 10-K, accessible in the investor relations section of
the company’s website at www.commandonline.com.

Management Commentary

“During 2014, despite a small decline in revenue, we achieved record
profitability and cash flow,” said president and CEO, Bubba Sandford.
“Our ongoing efforts to align our corporate culture to better support
our branch offices and focus on providing excellent service to customers
who appreciate our value have led to improving our operations and
increasing shareholder value. By strengthening our cash balance we are
in a stronger position to negotiate better terms for our workers’
compensation insurance and banking arrangements as well as invest in
growth opportunities.

“During the year we expanded our number of branch locations to 55 field
offices with the opening of three new offices in Houston, Texas,
Knoxville, Tennessee, and Watford City, North Dakota.

“Part of our strategy is to remain diversified across a broad range of
customers, industries and geographies, so we are not overly dependent on
any one industry or customer. The sharp decline in oil prices in the
second half of 2014 has led to a slowing of new drilling activity in
North Dakota and Texas where we have a significant presence. However, we
continue to see strong demand for temporary labor in both of these
markets, as well as across the many industries and customers we service
there.

“Two key events during the year that reflect our continued efforts to
increase shareholder value and transparency were the appointments of
John Stewart as chairman of the board and Jeff Wilson as our chief
financial officer. Both John and Jeff possess considerable public
company experience that will help our efforts to improve corporate
governance and attract investors to our story.”

Stewart commented: “In my 30 years in North Dakota, there have been
several economic cycles. The producers in the Bakken will continue to
invest and expand despite the recent decline in oil prices. Oil and gas
related activities have been going at breakneck speed for the past
several years. The state will now have a chance to catch up on needed
infrastructure projects that will support this long-term energy
opportunity.”

Continued Sandford: “Another significant improvement in 2014 was our
year end cash balance reaching $8.6 million, which equates to $0.13 per
diluted share. We are continuously evaluating ways to deploy capital in
a manner that builds long-term shareholder value while keeping in mind
that we should maintain sufficient capital reserves for any unexpected
opportunities that may arise.

“Our first objective is to continue improving same-store revenue growth
and profitability through training and coaching of our branch managers
and staff. We will continue to take advantage of opportunities to
increase revenue and profitability in every market we serve. We believe
this is the most direct and least expensive way to increase shareholder
value.

“We plan to open additional branches in areas where we have an existing
customer base and strong local economics. Our ability to open new
branches will be determined in part by our ability to hire and train
well qualified managers. Quality managers are essential to the
profitable operation of any branch.

“We will also continue to evaluate acquisition opportunities and pursue
only those that provide a good fit with our business and culture, as
well as expand our geographic footprint or provide a lower cost of entry
into a new market or industry.

“Finally, to the extent our market valuation does not fully reflect the
strength of our business and the turnaround in performance we have
achieved, we will consider implementing a stock repurchase program.

“Another key part of our strategy is to remain lean and nimble in order
to take advantage of changes in the market. With our strong cash
position, no long term-debt, and the support of a strengthening economy,
we are well positioned to take advantage of the many opportunities for
growth and expansion.”

About Command Center

Command Center provides flexible on-demand employment solutions to
businesses in the United States, primarily in the areas of light
industrial, hospitality and event services. Through 55 field offices,
the company provides employment annually for more than 32,000 temporary
employees working for approximately 3,400 clients. For more information
about Command Center, go to www.commandonline.com.

Important Cautions Regarding Forward Looking Statements

This news release contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and
other statements that are other than statements of historical facts.
These statements are subject to uncertainties and risks including, but
not limited to, the severity and duration of the general economic
downturn, the availability of workers’ compensation insurance coverage,
the availability of capital and suitable financing for the Company's
activities, the ability to attract, develop and retain qualified store
managers and other personnel, product and service demand and acceptance,
changes in technology, the impact of competition and pricing, government
regulation, and other risks set forth in the Form 10-K filed with the
Securities and Exchange Commission on March 4, 2015, and in other
statements filed from time to time with the Securities and Exchange
Commission. All such forward-looking statements, whether written or
oral, and whether made by or on behalf of the Company, are expressly
qualified by these cautionary statements and any other cautionary
statements which may accompany the forward-looking statements. In
addition, the Company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the
date hereof.

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally
accepted accounting principles (“GAAP”), the company also presents
adjusted EBITDA, a non-GAAP term defined as earnings before interest,
taxes, depreciation and amortization, and the change in fair value of
derivative liabilities (the company previously referred to this metric
as “EBITDA-D”).

The company uses adjusted EBITDA and Income excluding impairment of
goodwill and tax benefit as a financial measure since management
believes investors find them a useful tool to perform more meaningful
comparisons of past, present and future operating results, and as a
complement to net income and other financial performance measures.
Adjusted EBITDA and Income excluding impairment of goodwill and tax
benefit are not intended to represent net income as defined by GAAP, and
such information should not be considered as an alternative to net
income or any other measure of performance prescribed by GAAP.

The following tables present a reconciliation of adjusted EBITDA to net
income for the periods presented as well as per basic share information
(in thousands except per share data):

Thirteen Weeks Ended

Fifty-Two Weeks Ended

December 26,2014

December 27,2013

December 26,2014

December 27,2013

EBITDA

$

1,752

$

1,473

$

7,028

$

4,719

Interest expense and other financing expense

(39

)

(75

)

(249

)

(504

)

Depreciation and amortization

(42

)

(67

)

(1,348

)

(351

)

Change in fair value of warrant liability

-

-

-

(787

)

Provision for income taxes

(552

)

(103

)

3,694

(137

)

Net income

$

1,118

$

1,228

$

9,126

$

2,941

EBITDA per share

$

0.03

$

0.02

$

0.11

$

0.08

Interest expense and other financing expense per share

(0.00

)

(0.00

)

(0.00

)

(0.01

)

Depreciation and amortization per share

(0.00

)

(0.00

)

(0.02

)

(0.01

)

Change in fair value of warrant liability per share

-

-

-

(0.01

)

Provision for income taxes per share

(0.01

)

(0.00

)

0.05

(0.00

)

Net income per share

$

0.02

$

0.02

$

0.14

$

0.05

Command Center, Inc.

Consolidated Balance Sheets

December 26, 2014

December 27, 2013

ASSETS

Current Assets

Cash

$

8,600,249

$

5,820,309

Restricted cash

-

25,619

Accounts receivable, net of allowance for doubtful accounts

9,029,347

10,577,250

Prepaid expenses, deposits and other

260,242

328,920

Prepaid workers' compensation

581,355

28,044

Other receivables

7,949

27,933

Current portion of deferred tax asset

1,760,000

-

Current portion of workers' compensation deposits

1,114,000

1,113,000

Total Current Assets

21,353,142

17,921,075

Property and equipment - net

430,987

350,767

Deferred tax asset, less current portion

2,095,000

-

Workers' compensation risk pool deposit, less current portion

1,790,633

1,783,112

Goodwill

2,500,000

3,306,786

Intangible assets - net

-

386,956

Total Assets

$

28,200,762

$

23,748,696

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable

$

546,247

$

402,672

Checks issued and payable

255,532

189,830

Account purchase agreement facility

2,900,104

8,050,633

Other current liabilities

249,445

326,319

Accrued wages and benefits

1,665,697

1,717,235

Current portion of workers' compensation premiums and claims
liability